Bank of Canada Interest Rate Commentary
December 8, 2006
On December 5th the Bank of Canada left their key interest rate unchanged at 4.5%. For the fourth time in a row the Bank has decided not to increase their rate. The last increase was of 0.25% on May 24, 2006. The Bank stated that while the Canadian economy appears to be weakening, it is not yet weak enough to justify a reduction in the rate. Most experts agree that rates will begin to drop early in the spring. The futures markets expect an 85% chance that there will be rate cuts by June 2007. The next Bank of Canada decision date is January 16, 2007.
